Cord cutters not replacing cable TV with online video

New research suggests that people who have cut the cord aren’t doing so because they think Netflix (s NFLX) provides a good alternative to their local cable TV company. In fact, those that go broadband-only are only slightly more likely to watch online video than those with pay-TV subscriptions, according to the latest data from Leichtman Research Group.

According to the research firm, 8 percent of U.S. households subscribe to broadband services without also having a pay TV subscription. That compares to the 70 percent of U.S. households that pay for both broadband and pay TV. But that minority of broadband-only subscribers is doing so mainly due to the cost of pay TV services, not the convenience of online video as a replacement.

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The common perception is that users who “cut the cord” or go without cable TV are largely relying on online video services like Netflix or Hulu Plus instead. But LRG reports that the percentage of broadband-only households that watch online video is only slightly higher than those that pay for cable. About 19 percent of broadband-only users watch online video daily and 55 percent do so weekly. By comparison, 17 percent of those who subscriber to cable TV and broadband watch online video daily, and 48 percent do so weekly.

Only 5 percent of broadband-only subscribers say they have kicked the pay TV habit because they can find what they want to watch online instead, and just 2 percent cite Netflix in particular as a reason for cutting the cord. A whopping 28 percent of broadband-only households cite cost as the main reason they don’t subscribe to cable, with another 26 percent saying they just don’t watch that much TV. 18 percent claim to have no need for a pay TV subscription. Income also seems to play a big part in who decides to pay for cable and who doesn’t: Those who go broadband-only have an household income that’s 10 percent lower than average and 20 percent lower than those that subscribe to broadband and pay TV.

After trying this myself I totally agree. Number one advantage is eliminating a bill of $100 per month. It would be nice if Netflix etc could replace the channel surfing experience but it doesn’t – yet. As the streaming appliances improve however i bet that changes. The article didn’t mention another major component: free broadcast TV. The best alternative today is OTT (over the top) + OTA (over the air) .http://www.cordcutterguide.com

I recall the music industry published similar studies a decade ago- that mainstream (read: non-pirate) music consumers had no interest in online audio distribution channels. That worked out well for them.

Ryan, you misinterpreted the results. You are confusing this group that has broadband-only (with no pay-TV) with cord-cutters. In fact, this group might include some cord-cutters, but it also includes people who never had pay-TV. Note that the results show that only 14% of this broadband-only group had video service in the past year. To be able to say what cord-cutters are doing, you have just look at what that 14% is doing. What this research mainly seems to find is that right now there is an aversion to online video among those who don’t have cable TV.